Highlights

Media

Suman Bery: The argumentative Indian A
reformed Planning Commission should reflect the diversity of Indian
debateBusiness Standard, September12, 2014

I was privileged to be the director-general of the
National Council of Applied Economic Research in New Delhi when that
distinguished organisation celebrated its golden jubilee in 2006. At
that time, I searched for documentation on how the institution came
into existence and came across an essay prepared by Peter Geithner,
the deputy head of the Ford Foundation in Delhi in the 1950s.1 The
Ford Foundation had recently established its first overseas office
in New Delhi, and its head, Douglas Ensminger, was requested by
Pandit Jawaharlal Nehru to support the new venture.

As narrated by Mr Geithner, while the Planning Commission was first
established in 1950, it really came into its own in the run up to
the second Five-Year Plan in 1956. In this process, the issue arose
of where capacity should be created for objective analysis to
underpin the design of that Plan. After considerable discussion it
was concluded that such capacity was best located outside government
in an independent, board-run organisation, rather than as part of
the government machinery.

The basic argument was that an entity situated within government
would inexorably find itself drawn to support and rationalise
government policy, rather than provide disinterested advice. More
controversially, it was also decided that the way to keep the
proposed institution focused on practical problems was to make it
dependent on contract research.

Those discussions took place almost 60 years ago. India, the world
and India's position in the world are fundamentally altered from
that era. It is entirely appropriate that the role and function of
the Planning Commission should be under review, and it is
encouraging that the prime minister has stimulated public debate on
the subject. From my perch here in the Netherlands, it has been
easier for me to follow the debate in the press than to participate
in live discussions. I have followed with interest the debate
sponsored by the advocacy group CUTS, as well as recent columns by
Shankar Acharya and C Rangarajan.

From these sources and other press reports, it appears that a
decision in principle has been taken to hive off many executive
functions that over time had been assigned to the Planning
Commission while strengthening its role as a central, influential
and (ideally) objective policy commentator. While not perhaps
impossible, it is certainly tricky for such a body to maintain its
independence from the government of the day, and much depends on the
formal governance mechanisms and informal conventions that emerge.
Some would argue that this is exactly the balancing act that the
chief economic adviser (CEA) to Union government has been required
to perform these many years, often with distinction. But this only
deepens the question of why a second such locus is needed,
particularly as the CEA is supported, at least in theory, by the
professional cadre of the Indian Economic Service. Read
full story